Haldia Petrochemicals is setting up a new phenol-acetone plant through its subsidiary AdPerma with a ₹6,000 crore investment. The facility, expected to start production by early 2027, aims to lower India's import reliance for these industrial chemicals. This move forms part of the company's long-term strategy to expand its product range using its existing chemical infrastructure.
Haldia Petrochemicals has announced a capital investment of ₹6,000 crore to construct a new phenol-acetone production facility. This project is being executed through its subsidiary, AdPerma, and marks a significant step in the company's strategy to move toward higher-value downstream chemical production. The plant is designed to produce 345,000 tonnes of phenol and 215,000 tonnes of acetone annually, with commercial operations targeted to begin by early 2027.
This investment is aimed at addressing the current supply gap in the Indian market, where domestic production meets less than half of the annual demand, which reaches nearly 700,000 tonnes. By setting up local production, the company aims to reduce India's heavy reliance on chemical imports from regions such as Southeast Asia, the Middle East, and China, aligning with broader goals of domestic supply chain security.
A key financial and operational advantage for this project is the company’s existing infrastructure. The new facility will be integrated within the current 1,120-acre Haldia complex, allowing AdPerma to utilize the company’s captive supply of benzene and propylene as feedstock. This vertical integration typically helps in controlling production costs by reducing dependence on external suppliers for essential raw materials.
Beyond immediate production, the project serves as a foundation for the company’s future growth in the specialty chemicals sector. Management intends to use this facility as a stepping stone to manufacture more complex derivatives, such as bisphenol-A and polycarbonates. These chemicals are used in various industrial applications, and moving into their production is a common path for chemical manufacturers looking to improve their profit margins.
However, large-scale projects in the petrochemical sector carry specific business risks. Investors should consider that such capital-intensive expansions involve significant execution risks, including potential delays or cost increases. Additionally, the chemical industry is cyclical, and the profitability of these new units will depend on global raw material prices, end-user demand, and the company's ability to maintain efficient operations once production commences. The company's ability to execute this project within the planned timeline and budget will be a key monitorable for market observers in the coming quarters.